Best Money Market ETFs in Canada 2024: Money market exchange-traded funds (ETFs) allocate capital into highly liquid assets such as hybrid-interest savings accounts (commonly referred to as cash), term deposits, short-term debt securities, cash equivalents, and other low-risk, short-term investments.
These ETFs, sometimes known as Cash ETFs or high-interest savings account (HISA) ETFs, offer convenient access to income while prioritizing capital preservation.
Within this guide, we explore the top money market ETFs available in Canada, discussing their advantages, drawbacks, fees, and whether they align with your portfolio objectives.
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Best Money Market ETFs in Canada
Canadians have a limited selection of Cash and HISA ETFs at their disposal. The available options include:
- Evolve High Interest Savings Account Fund (HISA)
- Horizons High Interest Savings ETF (CASH)
- CI High Interest Savings ETF (CSAV)
- Horizons Cash Maximizer ETF (HSAV)
- Purpose High Interest Savings ETF (PSA)
- iShares Premium Money Market ETF (CMR)
- Ninepoint High Interest Savings Fund (NSAV)
1. Evolve High Interest Savings Account
Ticker: HISA
Management Expense Ratio (MER): 0.15%
Assets under Management (AUM): $5.18 billion
Yield: 5.00%
Inception Date: November 20, 2019
For those seeking exposure to high-interest deposit accounts and consistent monthly cash flows, the Evolve High Interest Savings Account Fund could be an appealing choice. It maintains a 100% allocation to cash and carries a “low” risk rating.
HISA offers monthly distributions, with its yield experiencing growth recently due to the rise in savings rates offered by banks.
This fund is listed on the NEO Exchange.
2. Horizons High Interest Savings ETF
Ticker: CASH
Management Expense Ratio (MER): 0.13%
Assets under Management (AUM): $4.07 billion
Yield: 5.06%
Inception Date: November 1, 2021
Similar to the Evolve HISA ETF, the Horizons CASH ETF is entirely invested in high-interest savings vehicles within Schedule 1 Canadian chartered banks.
Available through discount brokerage trading services across Canada, CASH is designed to offer monthly distributions to its unitholders. This ETF can be held in both registered and non-registered investment accounts and is listed on the TSX.
3. CI High Interest Savings ETF
Ticker: CSAV
Management Expense Ratio (MER): 0.16%
Assets under Management (AUM): $8.74 billion
Yield: 4.90%
Inception Date: June 14, 2019
Focused on low-risk investments, the CSAV ETF primarily allocates its funds into high-interest deposit accounts within Canada. It provides monthly income distributions and is listed on the Toronto Stock Exchange.
CSAV’s holdings include positions in CIBC, National Bank, Scotiabank, and BMO.
4. Purpose High Interest Savings ETF
Ticker: PSA
Management Expense Ratio (MER): 0.16%
Assets under Management (AUM): $5.48 billion
Yield: 5.05% (Gross)
Inception Date: October 10, 2013
The Purpose High Interest Savings ETF stands as one of the longest-standing Cash ETFs in Canada.
It focuses on investments in high-interest savings accounts held at premier Canadian banks, including National Bank, CIBC, and Scotiabank, providing monthly distributions to investors.
PSA is eligible for Dividend Reinvestment Plans (DRIP), Pre-Authorized Cash Contribution Plans (PACC), and various registered accounts such as Tax-Free Savings Accounts (TFSAs) and Registered Retirement Savings Plans (RRSPs).
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5. Horizons Cash Maximizer ETF
Ticker: HSAV
Management Expense Ratio (MER): 0.12%
Assets under Management (AUM): $2.20 billion
Yield: 5.30%
Inception Date: February 5, 2020
The Horizon Cash Maximizer ETF also channels investments into high-interest deposit accounts, yet it does not anticipate making taxable distributions. Instead, the net interest income earned is reinvested and reflected in the fund’s net asset value on a daily basis.
HSAV halted new subscriptions on February 3, 2022, after reaching $2 billion in net asset value.
Alongside CASH and HISA, Horizons offers the Horizon USD Cash Maximizer ETF (HSUV.U).
6. Ninepoint High Interest Savings Fund
Ticker: NSAV
Management Expense Ratio (MER): 0.14%
Inception Date: November 17, 2020
1-year return: 5.14%
Current Interest Rate from Banks: 5.39%
The Ninepoint High Interest Savings fund is available both as an ETF and a mutual fund (Series A & F).
It allocates its investments into high-interest savings accounts at Schedule 1 banks and holds a low-risk rating.
NSAV is listed on the NEO Exchange.
7. iShares Premium Money Market ETF
Ticker: CMR
Management Expense Ratio (MER): 0.24%
Assets under Management (AUM): $655 million
1-year return: 4.64%
Inception Date: February 19, 2008
Differing from the other ETFs featured in this list, CMR is a more conventional money market fund that invests in short-term, high-quality debt instruments. Its top 10 holdings include entities from Ontario, Saskatchewan, and British Columbia, such as RBC, TD, National Bank, Nestle, Ontario Teachers, and MUFG Bank Ltd.
Listed on the TSX, this fund supports Dividend Reinvestment Plans (DRIP), Pre-Authorized Cash Contribution Plans (PACC), and Systematic Withdrawal Plans (SWP).
What is a Money Market ETF
A money market ETF represents a category of Exchange-Traded Funds that primarily invests in cash, cash-equivalent securities, and short-term debts like U.S. Treasury bills.
These ETFs are structured to prioritize capital preservation and modest appreciation, offering investors exposure to minimal risk.
However, due to their conservative nature, money market ETFs and funds might not effectively counter high inflation rates.
In Canada, a money market ETF focused on high-interest deposit accounts within Canadian banks is commonly referred to as a HISA ETF.
How To Buy Money Market ETFs in Canada
You have the option to purchase and sell money market ETFs through brokerage platforms like Wealthsimple Trade and Questrade.
Wealthsimple Trade
- Trade stocks and ETFs without fees
- Ideal platform for novice traders
- Receive a $25 cash bonus with a deposit of $150 or more
- Enjoy waived transfer fees up to $150
Questrade
- Trade stocks, ETFs, options, and more.
- Receive $50 trade credit upon funding your account with $1,000.
- Benefit from low and competitive trading fees.
- Preferred platform for experienced traders.
- Transfer fees are waived.
Money Market ETF Fees
When purchasing a money market ETF, you should anticipate paying a management expense ratio (MER), which encompasses:
- Management fees covering investment manager salaries, marketing, and other service expenses.
- Sales taxes.
The MER is typically expressed as a percentage of the ETF’s net asset value.
Additionally, the fund may incur transaction and trading fees.
Upon buying the ETF, your brokerage might impose a trading commission (up to $10 per transaction). However, this fee is waived by commission-free trading platforms like Questrade and Wealthsimple Trade.
Pros of Money Market ETFs
The advantages of Cash and HISA ETFs include:
- Offering exposure to high-interest deposit accounts.
- Ease of buying and selling throughout the trading day, ensuring high liquidity.
- Suitability for investors with a low risk tolerance.
- Deposits held at Tier 1 Canadian banks.
- Eligibility for both registered and non-registered investment accounts.
- Typically providing income distributions.
- No minimum balance or lock-up period required.
- Potential for higher yields compared to traditional savings accounts.
Cons of Money Market ETFs
The disadvantages of money market ETFs comprise:
- Lack of protection by the Canada Deposit Insurance Corporation (CDIC).
- High management fees that diminish your returns.
- Limited potential for capital growth.
Are Money Market ETFs Worth It?
If you’re aiming for long-term capital growth, a diversified portfolio of stocks and bonds might be more suitable.
However, for capital preservation, Cash ETFs present an advantageous option due to their low-risk nature and minimal volatility. Additionally, they offer the convenience of easy access to cash when needed, even on short notice.
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